Regulatory AlertsSR 13-7 / CA 13-4: State Member Bank Branching Considerations
The Federal Reserve issued this guidance to clarify the criteria under which state member banks in less-than-satisfactory condition may establish de novo branches. The letter defines specific supervisory rating thresholds and requires applicants to demonstrate a well-defined rationale, satisfactory remediation of issues, and stable financial performance. Approved expansions are strictly limited to one percent of existing branches per quarter, capped at 40 branches annually, and must remain within or contiguous to the bank's current market area.
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